Office kitchens the target for Woolies delivery service

Woolworths is focusing in on office kitchens across the country as part of the launch of its grocery delivery platform aimed solely at business clients.

The supermarket giant first trialled its “Woolworths at Work” site in 2020 — when most professional services firms were working from home. Despite this, the retailer was able to test and refine the program by delivering to essential services operators.

“A really big part of our focus is essential service businesses – early learning businesses and aged care. They were our core customers that we helped serve,” Woolworths at Work general manager Jarad Nass said.

Now lockdowns are in the rearview mirror, Woolworths hopes to take a slice of Australia’s business supplies market by offering one platform for cleaning products, office supplies and groceries for corporate clients.

Head of Woolworths at Work Jarad Nass said essential services businesses were a main sector for the company’s business deliveries.

Unlike users on Woolworths’ main retail site, business customers have access to real-time spend reports and billing information, free next-day delivery for orders over $99 and more options to get products delivered on Monday mornings.

While Australia’s winter COVID-19 and flu season have led to renewed calls for more staff to work at home, Nass is confident there is still strong interest from workplaces for a one-stop shop for office supplies and groceries.

”What we’ve learned is that it is a very dynamic working environment at the moment, [but] there is still a lot of demand for this service,” Nass said.

Beyond office towers, Woolworths is largely focused on organisations such as schools, hospitals and aged-care facilities, which have been the main sectors using the platform.

The retailer has been working to increase business-to-business sales over the past year. Its B2B food segment, which includes PFD Food Services, its international exports and wholesale business, generated $1.4 billion in sales in the first half of 2022 – an increase of 376 per cent on the same period in 2021.

Woolworths at Work isn’t the first new grocery delivery format Woolworths has tried this year. It also launched one-hour deliveries in a small group of Sydney suburbs via its Metro60 app   in June. 

Fellow supermarket giant Coles also has a dedicated business delivery channel, with free delivery on orders worth more than $250.

The Reserve Bank of Australia raised the official cash rate another 50 basis points of Tuesday, putting further pressure on the operating costs of households and businesses.

Despite this, analysts have been viewing the outlook for supermarkets as robust, given businesses and individuals will likely be spending a larger portion of their budgets on everyday essentials rather than luxuries.

Citi analysts have upgraded their 2023 earnings estimates for Woolworths by 3 per cent and Coles by 4 per cent, given expectations that inflation will increase like-for-like sales growth figures over the next year.

Woolworths shares are 7.3 per cent higher for the month, while Coles is trading 7.2 per cent higher compared with the beginning of July.

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